It’s been nearly 10 years since August 25, 2014, the day that Amazon made one of the most significant acquisitions in its history: It bought Twitch for $970 million, intent on to creating its own big platform for creators to compete with YouTube, Instagram, and the yet-to-arrive TikTok. A decade later, the numbers still don’t add up for the company.
Twitch isn’t profitable. Despite its popularity, Twitch remains unprofitable after all this time, according to employees and former employees quoted in The Wall Street Journal. Their testimony confirms a situation that Twitch CEO Dan Clancy discussed in January 2024.
Popularity isn’t everything. The data seems contradictory, especially since Twitch’s popularity remains extraordinary—the platform continues to break viewership records. However, like YouTube in the past, after attracting creators and streamers, it began exploiting their popularity by charging them high commissions.
Downsizing and more downsizing. The company hasn’t stopped cutting staff: It fired 400 people in 2023 and announced another 500 layoffs—35% of its workforce—a few months ago. At that time, Clancy argued that Twitch wasn’t profitable. “For some time now, the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today,” he said.
But Amazon has its back. He also wanted to clarify that “Amazon’s support for Twitch has been extreme despite everything. The most important thing for us to be sustainable in the long term is to ensure we’re not losing money.”
Twitch overview in the U.S. The U.S. has the largest share of Twitch viewers and is home to nearly a quarter of all users. According to Statista, there are more than 35 million Twitch users in the country monthly, which could grow to 36.7 million by 2025. However, the service isn’t profitable for the company.
It’s a long-term bet. Amazon is a company that usually doesn’t worry about the short term. Its founder, Jeff Bezos, had to tolerate years of criticism at the beginning of the company’s journey for its lack of profitability, but today, it’s one of the technology giants. However, the deficient performance of other divisions—such as its Echo devices—may cause Amazon CEO Andy Jassy to stop being so permissive with Twitch and its low profits.
This article was written by Javier Pastor and originally published in Spanish on Xataka.
Image | Caspar Camille Rubin
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